MONETARY POLICY BEFORE AND AFTER THE FINANCIAL CRISIS. EVIDENCE FROM INFLATION TARGETING COUNTRIES IN CENTRAL AND EASTERN EUROPE

Abstract

The aim of our study is to review the monetary framework and instruments adopted by the inflation-targeting countries in Central and Eastern Europe, from 2005-ownwards. We employ a qualitative approach and develop a comparative analysis of the changes that occurred in the conduct of monetary policy after the 2008 financial crisis. The results highlight that the central banks in our sample have adjusted their policy in order to counteract the effects of the financial crisis and adopt different instruments to fulfill this aim. The contribution of our study is twofold. First, we offer a review of the literature regarding the adjustments in the monetary policy after the crisis and their effectiveness. Second, we make a comparative analysis between countries with respect to the path of monetary policy from conventional to unconventional and assess the (potential) way back.